First of all, what is remortgaging? Well, it’s when someone that already owns a home with a mortgage, decides that they want to take advantage of more favourable terms, such as a lower interest rate or to borrow more money. They would find the best deal and a solicitor will draw down the new mortgage and repay the outstanding one.
The mortgage that you secured when buying your property may not be the best deal after a few years, especially if your home has gone up in value, which reduces your percentage loan. This might enable you to negotiate a lower interest rate with your new or even existing lender.
Alternatively, you might have been on a lower fixed rate that is about to come to an end. When this happens, the interest rate you are charged usually changes to the lender’s Standard Variable Rate (SVR) although sometimes the new rate might be directly linked to other variable datums such as LIBOR or the Bank of England’s Base Lending Rate.
You can remortgage at any time but you may incur penalties if your initial mortgage agreement stipulates fees in certain circumstances. Early repayment may well incur a penalty. There may also be costs such as legal, valuation fees and arrangement fees, (although sometimes lenders pay these for you). So it’s important to allow for these costs when evaluating the benefits of remortgaging.
Many people remortgage so that they can extend their property or otherwise improve it, perhaps by installing a new kitchen. Others want to raise some cash for a child’s education or to give them for the deposit on their new home. It is also possible to remortgage so as to consolidate loans, although in such circumstances you really should talk to your mortgage adviser before doing this. A mortgage may be cheaper on the face of it, but a mortgage over 25 years will likely cost you more than an unsecured loan over say 5 years. The legal ramifications of non-payment also differ between secured and unsecured loans.
It’s important to be aware that all the usual information will be required when remortgaging as when you took your original mortgage. Affordability and stress testing will also be undertaken, so make sure that you plan ahead, perhaps 3 or 4 months before you need to remortgage. This will give you time to get all your information together and search the market for the best deal available. This, of course, is where employing a specialist such as Mortgage Required can pay dividends. We can advise you on the best options and make the process smooth and painless.
Contact our remortgage experts today or book a free online appointment.
Data shows landlords could miss out on green mortgages due to expired energy performance certificates.
Buying a house is a big deal, and where you are planning to buy will make a difference financially. In this short blog, we look at the most affordable and most expensive areas and how much you need to be earning to buy in there.
11 days ago
Equity release is a type of mortgage that allows homeowners 55 and over to access money from their property's equity without having to leave their home. This is done by securing a loan against the house which is usually repaid by selling the property when the borrower passes away or has to move into long-term care.
12 days ago
It’s important to ask questions about the property you are interested in before taking that step to make an offer. A little probing can make all the difference between buying your dream house or something that requires a lot of work.
15 days ago
There are millions of homeowners over the age of 60 who are likely to release money from their homes to pay for their lifestyle during retirement giving those who are 'asset rich but cash poor' a way to live out their retirement the way they wish.
22 days ago
The average age of a first-time buyer in the UK is two years older than 10 years ago. This is understandable with managing the cost-of-living and challenges within the economy such as high interest rates making it difficult to get onto the property ladder.
24 days ago
Skipton Building Society launches ‘Delayed Start’ mortgage meaning first time buyers won’t be required to make repayments for the first three months.
According to a survey by Skipton, first time buyers who bought their home in the last five years found that in the first three months of living there, they were spending upwards of £30,000.
2 May 2025
If you have recently moved into a property with a garden that requires a little TLC, or you’d like to get on top of your current green space, check out our tips.